Capstone Reports Significant Increase in Grade and Classification of Esso Mineral Resource at Kutcho
By Capstone Mining Corp., PRNESunday, December 5, 2010
Higher Grades and a Reclassification of Resources Expected to Enhance Economics of the Pending Pre-feasibility Study
VANCOUVER, Canada, December 6, 2010 - Capstone Mining Corp. (CS: TSX) today announced the results of a National
Instrument 43-101 compliant mineral resource estimate for the Esso deposit at
its high grade copper-zinc-gold-silver Kutcho Project in British Columbia, in
which all mineral resources in the Esso deposit were converted to the
indicated category.
The net result of the successful 2010 infill drill program was
significantly improved continuity of the mineralization in the high grade
Esso deposit, resulting in all of the mineralization being moved into the
indicated mineral resource category, including mineralization previously
classified in the inferred category. Using a 1.5% copper cut-off for
illustrative purposes, grades for zinc and silver increased by approximately
50% versus prior estimates and increased gold by more than 15% even though
this was just an infill-focussed drill program. The updated mineral resource
estimate for Esso, at a 1.5% copper cut-off, is tabulated below and at
various other copper cut-off grades in the table attached; the actual cut-off
grade applicable to Esso will be established as part of the pre-feasibility
study ("PFS") currently nearing completion and will be based upon an NSR
formula including by-product credits and accounting for metallurgical
recovery rates.
Mineral Resources by Class for Esso Deposit, Kutcho Project (at
a 1.5% copper cut-off) - November 2010
Classification Tonnes Copper (%) Zinc Gold Silver
(000's)* (%) (g/t) (g/t)
Measured (M) - - - - -
Indicated (I) 1,816.2 2.69 6.18 0.66 64.8
Sub-total (M+I)** 1,816.2 2.69 6.18 0.66 64.8
Additional Inferred - - - - -
(table continues)
Classification Contained Contained Zinc Contained Contained
Copper (000s (000s lb) Gold Silver (000s
lb) (000s oz) oz)
Measured (M) - - - -
Indicated (I) 107,709 247,450 39 3,783
Sub-total (M+I)** 107,709 247,450 39 3,783
Additional Inferred - - - -
*Rounded to nearest thousand **Totals may not add exactly due to rounding
"The significant increase in the grade and confidence level of the
mineral resources at the Esso deposit should enhance the overall economics of
the Kutcho Project," said Stephen Quin, Capstone's President. "Combining very
high grade feed from Esso with high grade tonnage from the Main deposit in
the early years of operation should boost production and reduce costs per
pound in the pre-feasibility study that is currently nearing completion."
Change in Mineral Resource Estimates 2009-2010
The 2010 updated mineral resource estimate for the Esso deposit resulted
in an overall gain in tonnage, grade and contained metal, as well as a
substantial positive upgrade in the classification of the mineral resource
over that reported in February 2009, prior to the commencement of the 2010
infill drill program. All of the previously inferred mineral resource in the
table below was upgraded into the indicated category, allowing it to be
included in the PFS. For reference and comparative purposes the prior mineral
resource estimate for the Esso deposit as reported on February 9, 2009 and
that was included on the preliminary economic assessment (and filed on SEDAR
on July 13, 2010) at the same 1.5% copper cut-off is tabulated below.
Prior Mineral Resources by Class for Esso Deposit, Kutcho
Project (at a 1.5% copper cut-off) - Feb.2009
Classification Tonnes Copper (%) Zinc Gold Silver
(000's)* (%) (g/t) (g/t)
Measured (M) - - - - -
Indicated (I) 950.9 2.60 4.10 0.56 43.4
Sub-total (M+I)** 950.9 2.60 4.10 0.56 43.4
Additional Inferred 802.9 2.57 4.15 0.61 37.6
(table continues)
Classification Contained Contained Zinc Contained Gold Contained
Copper (000s (000s lb) (000s oz) Silver
lb) (000s oz)
Measured (M) - - - -
Indicated (I) 54,406 85,940 17 1,326
Sub-total (M+I)** 54,406 85,940 17 1,326
Additional Inferred 45,230 73,377 16 970
*Rounded to nearest thousand
**Totals may not add exactly due to rounding
Mineral resources that are not mineral reserves do not have demonstrated
economic viability. Mineral resource estimates do not account for
mineability, selectivity, mining loss and dilution. These mineral resource
estimates include inferred mineral resources that are normally considered too
speculative geologically to have economic considerations applied to them that
would enable them to be categorized as mineral reserves. There is also no
certainty that these inferred mineral resources will be converted to measured
and indicated categories through further drilling, or into mineral reserves,
once economic considerations are applied.
Timing of Prefeasibility Study
Capstone also reports that the PFS for the Kutcho Project will be
completed in January 2011. All major components of the PFS are nearing
completion, with final metallurgical testing on the Esso deposit and annual
composites of Main and Esso mineralization currently underway.
Resource Estimation Methodology & Responsibility
Mr. Garth Kirkham, P.Geo. of Kirkham Geosystems Ltd. ("KGL") estimated
the mineral resources at Esso in November 2010 and on February 9, 2009.
The Esso mineral resource estimation was completed in MineSight(R) using
a 3 dimensional block model consisted of 5 x 5 x 5 m block sizes using 1.5m
composites and the mineralization was coded to the assay database. A
wireframe was created and geostatistical analysis completed on both the assay
data and the composite data for each of the metals estimated. The resulting
interpretation is a moderately dipping mineralized zone with good continuity.
The block grades were interpolated using independently derived ordinary
kriged parameters. Resource classification methodology takes into account
both continuity of the mineralization and sample density of the exploration
drilling. In summary, the parameters used are as follows:
- Composite Length is 1.5 meters.
- Block size is 5m X 5m X 5m.
- Estimation strategy was Ordinary Kriging.
- Ellipse direction is 0 degrees azimuth and -50 degrees dip to follow
bedding.
- Three passes were used; 100m X 100m X 30m; 50m X 50m X 20m; 25m X 25m X
15m.
- Minimum# of composites was 4.
- Maximum# of composites was 16.
- Maximum# of composites per drill hole was 3.
- Grade cutting was applied to outlier data where grades exceeded the
following thresholds:
- 11% Cu
- 27% Zn
- 2.2 gpt Au
- 300 gpt Ag
Classification of resources were determined to be in the Indicated
category.
The prior mineral resources for the Kutcho Project were also estimated by
Garth Kirkham, P.Geo., an independent Qualified Person as defined by National
Instrument 43-101 ("NI 43-101") and were reported in a news release dated
February 9, 2009 but are summarized herein for convenience. Readers should
review the February 9, 2009 news release for additional information,
including the mineral resource estimates at different cut-off grades, the
parameters used in the estimate and the required NI 43-101 disclosure.
Quality Assurance
The technical information in this news release has been prepared in
accordance with Canadian regulatory requirements set out in National
Instrument 43-101 and reviewed by Stephen P. Quin, P. Geo., President of
Capstone Mining Corp. The exploration activities at the Kutcho project site
are carried out under the supervision of Brad Mercer, P. Geo., VP Exploration
of Capstone, who has reviewed and approves the content of this news release.
The analytical method for the copper, zinc and silver analyses is aqua
regia digestion of the samples followed by atomic absorption spectroscopy.
Where zinc values exceed 30%, a subsequent volumetric analysis is performed.
Gold is analysed by fire assay fusion with atomic absorption spectroscopy
finish for gold. Analyses are carried out by ALS CHEMEX in North Vancouver.
When visible gold is noted in drill core samples or regular fire assay values
appear unusually high, the pulp and screen metallic assay method is used to
determine the total gold content and gold contents of different size
fractions. This is considered industry best practice when dealing with coarse
gold mineralization where a nugget effect is suspected. This determination is
accepted as the most representative value and is used in the assay database
for mineral resource calculations. Blank and standard samples are used for
quality assurance and quality control. Where more than two check samples
assay outside expected ranges, the entire batch is re-assayed. After the
completion of planned drill programs at Kutcho, random check assays will be
carried out by Inspectorate-IPL of Vancouver.
Forward-Looking Statements
This document may contain "forward-looking information" within the
meaning of Canadian securities legislation and "forward-looking statements"
within the meaning of the United States Private Securities Litigation Reform
Act of 1995 (collectively, "forward-looking statements"). These
forward-looking statements are made as of the date of this document and
Capstone Mining Corp. (the "Company") does not intend, and does not assume
any obligation, to update these forward-looking statements.
Forward-looking statements relate to future events or future performance
and reflect Company management's expectations or beliefs regarding future
events and include, but are not limited to, statements with respect to the
estimation of mineral reserves and mineral resources, the realization of
mineral reserve estimates, the timing and amount of estimated future
production, costs of production, capital expenditures, success of mining
operations, environmental risks, unanticipated reclamation expenses, title
disputes or claims and limitations on insurance coverage. In certain cases,
forward-looking statements can be identified by the use of words such as
"plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases or
statements that certain actions, events or results "may", "could", "would",
"might" or "will be taken", "occur" or "be achieved" or the negative of these
terms or comparable terminology. By their very nature forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the
Company to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. Such
factors include, among others, risks related to actual results of current
exploration activities; changes in project parameters as plans continue to be
refined; future prices of mineral resources; possible variations in ore
reserves, grade or recovery rates; accidents, labour disputes and other risks
of the mining industry; delays in obtaining governmental approvals or
financing or in the completion of development or construction activities; as
well as those factors detailed from time to time in the Company's interim and
annual financial statements and management's discussion and analysis of those
statements, all of which are filed and available for review on SEDAR at
www.sedar.com. Although the Company has attempted to identify important
factors that could cause actual actions, events or results to differ
materially from those described in forward-looking statements, there may be
other factors that cause actions, events or results not to be as anticipated,
estimated or intended. There can be no assurance that forward-looking
statements will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements.
Esso Deposit, Kutcho Project - Mineral Resources by Class at
Select Copper Cut-offs
To Accompany News Release dated December 06, 2010
Classification Cut-Off Tonnes Copper Zinc Gold Silver
(Cu%) (000's)* (%) (%) (g/t) (g/t)
Measured (M) - - - - - -
Indicated (I) 0.00 2,891,374 2.06 4.96 0.53 50.99
0.25 2,879,304 2.07 4.98 0.53 51.18
0.50 2,822,614 2.10 5.07 0.54 51.99
0.75 2,604,362 2.22 5.35 0.57 55.02
1.00 2,381,015 2.35 5.63 0.60 57.98
1.25 2,080,553 2.52 5.91 0.63 61.61
1.50 1,816,191 2.69 6.18 0.66 64.78
1.75 1,555,743 2.87 6.42 0.70 68.12
2.00 1,328,624 3.04 6.70 0.72 71.36
2.25 1,088,241 3.25 7.07 0.76 74.65
2.50 853,070 3.48 7.27 0.80 79.26
2.75 672,885 3.72 7.62 0.84 83.53
3.00 518,707 3.97 8.14 0.87 87.21
Additional - - - - - -
Inferred
(table continues)
Classification Contained Contained Zinc Contained Contained
Copper (000s lb)* Gold Silver
(000s lb)* (000s oz)* (000s oz)*
Measured (M) - - - -
Indicated (I) 131,147 316,380 49.4 4,740
131,088 316,164 49.4 4,737
130,586 315,241 49.0 4,718
127,545 306,914 47.5 4,607
123,252 295,359 45.6 4,439
115,799 271,165 42.2 4,121
107,752 247,460 38.7 3,782
98,433 220,247 34.9 3,407
89,101 196,172 31.0 3,048
77,872 169,736 26.6 2,612
65,540 136,691 21.9 2,174
55,142 112,988 18.1 1,807
45,367 93,057 14.5 1,454
Additional Inferred - - - -
*Rounded to nearest thousand **Totals may not add exactly due to rounding
For further information about Capstone, please contact:
Darren Pylot, Vice Chairman & CEO or Stephen Quin, President
at +1(604)-684-8894 or +1(866)-684-8894 or e-mail Capstone at
info@capstonemining.com
For further information about Capstone, please contact:
Darren Pylot, Vice Chairman & CEO or Stephen Quin, President
at +1(604)-684-8894 or +1(866)-684-8894 or e-mail Capstone at
info at capstonemining.com
